The Money Shop owner looking at £15.4m customer payout
The owner of The Money Shop is going to be refunding £15.4m to 147,000 customers after the lender was investigated by the Financial Conduct Authority (FCA). It is owned by Dollar Financial UK, who as trade as Paydday UK, Payday Express and Ladder Loans.
They are going to reimburse customers who have fallen foul of the way affordability checks were handled, as well as system errors and debt collection mistakes.
The investigation found that many customers were lent more than they could afford to repay, and as a result, the company has agreed to change their lending criteria.
Jonathan Davidson, director of supervision for retail and authorisations at the FCA, said: "The FCA expects all credit providers to carry out proper checks to ensure that borrowers don’t take on more than they can afford to pay back. We are encouraged that Dollar is committed to putting things right for its customers.”
The FCA said 65,000 customers are going to be contacted and will receive a cash refund, while 67,000 would see their current loan balance reduced. 15,000 customers will see both. Those affected will not need to do anything, as the FCA is making Dollar Finance do all the donkey work. The money will start to go out early next year.
Dollar chief executive Stuart Howard said: "It is proper that we put things right where they have gone wrong and I have gone further than the review in reforming the way our business operates to reflect the company aim of being the most responsible lender in its market place."